Most people view agriculture as a profession that includes poor and overworked farmers with antiquated tools on a rural farm. The young adults still think that agribusiness is a poor man’s occupation, they all want a white-collar job. Agribusiness isn’t something that pops up in our minds, we tend to think about other less strenuous means of making money, a profession that people won’t laugh at.
According to the Food and Agriculture Organization of the United Nations (FAO), over 70% of the world’s needs are met by small farmers.
What does Agribusiness entail?
Agribusiness is a business sector that encompasses all economic activities related to farming such as crop production, farm machinery, breeding, chemicals, distribution, marketing, and sales. It is the combination of the word “agriculture” and “business” and refers to any business related to farming. In developed countries, essential activities of agriculture are carried on other lands away from the farm. These other activities include storage, processing, and preservation of the products that are separated from basic farming. Also, the production of fertilizers, farm equipment, etc. is different from manual farm work. Agriculture has now expanded into different sectors.
Farmers rear animals and cultivate fruits and vegetables using sophisticated types of machinery, farmers are also using everything from drawings to GPS to track their harvesting operations. These types of machinery have been designed to drive themselves and as a result, the harvesting and production process becomes twice or even three times faster, what defines an agribusiness is innovation.
The three sectors involved in Agribusiness are:
- The agricultural input sector
- The production sector
- The processing-manufacturing sector
There are three components of Agribusiness which are:
- Breeding: This is a branch of agriculture that involves rearing animals for food products or the breeding of plant species to produce a genetically enhanced crop seed.
- Machinery and Equipment: This is one of the biggest segments in an agribusiness, it refers to all types of farm machinery like tractors, shovels, cutlass, etc.
- Agrichemical/Agrochemicals: These are fertilizers, pesticides, etc. used on the Farm.
FACTORS TO CONSIDER BEFORE SETTING UP AN AGRIBUSINESS
Before you venture into any business you should know what products and services you will provide. This involves getting a business plan. This plan includes the services you will provide to make an adequate profit, the correct licenses to get, and an insurance policy to cover the business in case of emergencies.
- Make intensive research: Before you decide on an idea, product, or service, it is important that you do a thorough research of the specific market you are planning to venture into.
- Register your business and acquire licenses: This is an essential step to take, you need to get the appropriate licenses to set up a business. Also, there are four major steps to registering a company. They include: Acquiring a Director identification number, Acquiring Digital Signature Certificate, filling a new user registration, and incorporating the company. Many legal firms or individuals could help you through the process. There are several types of company registrations e.g. Limited Liability, private limited, public limited, partnership, proprietorship, etc.
- Get enough funds: Seek the right form to get funds for your business. Getting a loan from the bank might be a good idea but also might be difficult due to the economy of the country. There are many alternative financing options available you could opt for any of them.
- Set up your business on land: Now that you’ve gotten the appropriate licenses for your business, you will need to get land to set up the business. Put a building on the land that is suitable for the purpose of the business.
- Devise a marketing strategy: A marketing strategy will help you get to your targeted audience such as farmers, suppliers, etc. Without a strategic marketing plan, agribusiness will suffer.
When making a marketing strategy you should ask yourself some questions:
- How is the future of the market?
- What are the problems of consumers?
- How challenging are the competitors
- What is the present potential of the market?
- How do you see your company in the market?
Agribusiness through its various value chains provides employment and helps to reduce the rate of poverty. It also serves as income for many people. It further increases the multifariousness of production to broaden the economic status. Thereby, transforming the agricultural sector towards an agro-industrial development.